NFTs: Where business meets art

Table of Contents   

• Do NFTs protect the artists who create them?
• What is an NFT?
• Why were NFTs created?
• Are NFTs succeeding in their intended goal?
• Why pessimists believe NFTs will fail
• Why Anil Dash believes NFTs cannot be saved
• Why optimists believe NFTs will succeed
• Summing up: Who is right?

Do NFTs protect the artists who create them?

The Non-Fungible Tokens is the latest in a long line of ideas and technologies designed to help creative professionals connect directly with their fans where business meets art.

American blogger and entrepreneur Anil Dash claims to have created the NFT, but due to the nature of blockchain technology and the Ethereum cryptocurrency which underpins NFTs, this claim is somewhat dubious.

Nevertheless, Anil was certainly one of the first people to create and market an NFT, and as the owner of Glitch (formerly Fog Creek Software), creators of respected technology websites including the developer resource Stack Overflow, Dash does have significant credibility within the online world. So just what is NFT art?

What is an NFT?

Non-Fungible Tokens are digital assets that represent a real-world asset, such as a piece of artwork. The NFT first appeared in 2014, but only rose to prominence when it became a popular way of buying and selling digital artworks during the last year or so.

Why were NFTs created?

The reason for the creation of the NFT was to allow a single person to own the “original” copy of digital artworks. Because digital files can be copied and distributed without any way of tracking the number of copies in existence, digital artworks can usually be regarded as having an infinite supply. The NFT was invented in an attempt to solve this problem.

Are NFTs succeeding in their intended goal?

The problem is, most NFTs already exist in some form elsewhere – if someone has a copy of a digital file and later decides to use that file to create an NFT, there is no way of knowing how many copies already exist of that same digital file.

Furthermore, even if an artist creates a wholly original piece and creates an NFT of that artwork before it is distributed via conventional methods, what is the value of the NFT? Unlike an original painting, which may be reproduced in the form of prints, there is no way to differentiate one digital file from another.

Why pessimists believe NFTs will fail

Perhaps the most worrying aspect of this analysis is that it has been made by Anil Dash himself – the creator of the NFT. He stated: “Technology should be enabling artists to exercise control over their work, to more easily sell it, to more strongly protect against others appropriating it without permission”.

Dash is disappointed by the progress of the NFT technology – it has created a lot of commercially exploitable hype but has failed in its purpose of empowering artists. If you like a piece of artwork and wish to purchase it, do you believe it is intrinsically more valuable just because it is listed on the blockchain? Dash doesn’t believe so.

That being the case, you might wonder why the NFT was created at all. Here’s why: Adil initially wanted to store the entire artwork on the blockchain. This would have created one, single, unique copy that had a different makeup to a simple digital file.

Unfortunately, the blockchain technology available at the time did not allow for this – the amount of data that could be stored was far insufficient to store a high-resolution artwork.

A temporary shortcut was used – a mathematical compression of the work was stored instead, along with a link to a web address of the “original” artwork. Together, these two pieces of data are technically sufficient to identify a copy of the digital file and verify that it is, indeed, the original artwork.

Why Anil Dash believes NFTs cannot be saved

The trouble is, seven years later, all of the NFT platforms in common use are still using the same shortcut. This means that when someone buys an NFT, they are not buying the actual digital artwork – they are buying a link to that artwork – and there is currently no mechanism in place to ensure that these links even persist over the long term.

As far as Anil is concerned: “Many of the works being sold today as NFTs aren’t even digital artworks at all; they’re just digital pictures of works created on conventional media”.

Why optimists believe NFTs will succeed

And now the flipside – Digital Artist Sarah Zucker is a firm believer in NFT technology and has been selling her work in this format for around two years. Soon enough, it became her main source of income and as of 2021, she has already netted $274,000 in sales from NFTs.

Sarah isn’t alone either – there are plenty of other artists who have benefitted from the recent media storm surrounding NFT. Of course, not everyone is netting six-figure sums from their work, but there are thousands of regular, legitimate artists who are fetching modest prices for their digital works – but still far more than they were earning from their physical pieces.

A unique feature of NFT based art is royalties can be attached to the piece so that every time the piece is sold in the future, the original artist receives a cut of these new proceeds. This may just be a few dollars, but with some NFTs currently selling for hundreds of thousands – or even millions – those royalties can be enormous.

Summing up: Who is right?

It is undeniably disappointing that blockchain technology has not advanced at the pace expected when the NFT was first envisaged, and legitimate concerns surround the current state of the underlying infrastructure.

Should the current “gold rush” come to a halt, those who have bought these products could find themselves having spent huge sums of cash on practically worthless tokens.

Blockchain technology could catch up, and the NFT marketplace may stabilize over the long term – but those are a lot of ifs. If you are an artist, you would be mad not to take advantage of the current situation – just in case it turns out to be short-lived.

Source: https://dailybayonet.com/non-fungible-tokens-nfts-where-business-meets-art/